According to Deutsche Bank, Orcel’s targets to 2024 will support “a progressive rerating of the title “
Piazza Affari they analysts continue to reward the new strategies of Andrea Orcel on the command deck of UniCredit. While in a negative stock market, investors after the rally yesterday (+ 10.8% to 12.8 euros at the end of the session) continue to stock up on UniCredit securities, covering up (+ 2% immediately the price at the sound of the bell bringing the price above 13 euros), Deutsche Bank raised the target price on the bank from € 15 to € 17, confirming the recommendation buy (buy, ed).
German financial analysts believe the bank’s 2024 targets will support “a progressive rerating of the title “, implying a “mix better with significantly lower costs in all areas” it’s a significantly more generous remuneration policy for shareholders“.
Furthermore, Deutsche Bank pointed out, the targets are “based on relatively conservative macro assumptions.” Also this morning Equity pointed out that the business plan is characterized by targets higher than expected it’s a significant improvement in shareholder remuneration. In particular, net revenues in 2024 exceeding 17 billion (16.2 billion expected), costs down to 9.4 billion (10 billion expected) and above all a cumulative distribution of capital, including coupons and buyback, of 16 billion against the 7.6 billion expected.
According to Equita, “the improvement of the remuneration policy is the most attractive element of the plan”, also because the 16 billion lire does not provide for “any distribution of excess capital”. In short, a “particularly rich remuneration policy, based entirely on the generation of capital and conservative assumptions on interest rates“: according to Equita, these are the most appreciated points of the plan, also in light of the fact that UniCredit” already has a good track record in terms of reducing operating costs “, a lever to sustain growth entirely in the hands of management.
Also good is the “focus on business capital light and on the growth of fees. Although this is the most ambitious part of the plan, – he explains – Unicredit enjoys good flexibility margins (especially on the cost side) to reach the targets “. To conclude, following the revision of the estimates, the distributed capital and the rolling of the model to 2023, Il target price of Unicredit rises by 18% to 16 euros and the buy judgment is confirmed.
Also Citigroup raised the target price from € 14.1 to € 15.7, confirming the recommendation buy. “Our estimates of Eps they rise due to greater efficiency, lower cost of risk and a certain drop in systemic burdens “, analysts reported. On average net profit forecasts increase by approximately 4% in the period 2021-2024.
Finally, with a statement released yesterday evening, Unicredit specified that it had defined and approved the implementation procedures for the execution of the buy-back program for a maximum amount of € 651,573,111 and for a number of Unicredit ordinary shares not exceeding 110,000,000. This is the second buyback program, for which a JP Morgan as an authorized third-party intermediary.
Unanimously positive also yesterday the analysts’ opinions on announced strategies. Jefferies (rating buy, target price of € 16.2 on the share) showed that the plan has an “incisive return on capital, equal to over 60% of the market capitalization”.
Shareholder remuneration is expected to progressively increase over the plan period, amounting to at least € 16 billion for 2021-2024. The base case estimated by Jefferies was set at 10 billion. Credit Suisse instead he confirmed the outperform recommendation and the target price of 13.8 euros and highlighted how the plan is “very detailed, highlighting a path to reach a Rote target of 10% by 2024”.
“Unicredit points to an ambitious growth story, which aims to mark an average annual compound rate of 10% net profit increase in 2021-2024”, highlighted by the Swiss bank. The analysts of Kepler Cheuvreuxfinally, they underlined a “very generous shareholder remuneration in sight” and note that the net profit target by 2024 is higher than their expectations.
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